Correlation Between Fulcrum Diversified and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Fulcrum Diversified and Stone Ridge at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fulcrum Diversified and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulcrum Diversified Absolute and Stone Ridge Diversified, you can compare the effects of market volatilities on Fulcrum Diversified and Stone Ridge and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fulcrum Diversified with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Diversified and Stone Ridge.
Diversification Opportunities for Fulcrum Diversified and Stone Ridge
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fulcrum and Stone is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Diversified Absolute and Stone Ridge Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge Diversified and Fulcrum Diversified is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fulcrum Diversified Absolute are associated (or correlated) with Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge Diversified has no effect on the direction of Fulcrum Diversified i.e., Fulcrum Diversified and Stone Ridge go up and down completely randomly.
Pair Corralation between Fulcrum Diversified and Stone Ridge
Assuming the 90 days horizon Fulcrum Diversified Absolute is expected to generate 1.81 times more return on investment than Stone Ridge. However, Fulcrum Diversified is 1.81 times more volatile than Stone Ridge Diversified. It trades about 0.22 of its potential returns per unit of risk. Stone Ridge Diversified is currently generating about 0.2 per unit of risk. If you would invest 933.00 in Fulcrum Diversified Absolute on October 21, 2024 and sell it today you would earn a total of 12.00 from holding Fulcrum Diversified Absolute or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulcrum Diversified Absolute vs. Stone Ridge Diversified
Performance |
| Timeline |
| Fulcrum Diversified |
| Stone Ridge Diversified |
Fulcrum Diversified and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulcrum Diversified and Stone Ridge
The main advantage of trading using opposite Fulcrum Diversified and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Diversified position performs unexpectedly, Stone Ridge can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Fulcrum Diversified vs. Ab Bond Inflation | Fulcrum Diversified vs. Great West Inflation Protected Securities | Fulcrum Diversified vs. Asg Managed Futures | Fulcrum Diversified vs. Lord Abbett Inflation |
| Stone Ridge vs. Victory Rs Partners | Stone Ridge vs. Applied Finance Explorer | Stone Ridge vs. Lsv Small Cap | Stone Ridge vs. Fidelity Small Cap |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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